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>>Back to Press notice index
Press Release 18 June 1998 LOW PAY COMMISSION RECOMMENDATIONS WILL MAKE A DIFFERENCE FOR THE LOW PAID "Two million low paid workers will have their wages boosted as a result of the Low Pay Commission’s recommendations for the National Minimum Wage", Professor George Bain, Chairman of the Low Pay Commission, said today. "The Commission’s recommended rate of £3.60 per hour achieves progress through prudence. It will help workers on low pay but will be affordable to efficient businesses and support a competitive economy." Professor Bain was commenting on the Low Pay Commission’s report to the Government on the National Minimum Wage, which was published today by Margaret Beckett, President of the Board of Trade. Professor Bain said: "Our unanimous recommendations reflect discussions we held with low-paid workers, managers of small businesses and advice workers across the country. The fact that Commissioners are drawn from employer, employee and academic organisations shows that social partnership can work. "Low-paid workers will see their earnings rise by an average of one-third. Women in particular will benefit, especially those working part-time. But we set the wage at a level efficient businesses can afford. We do not expect job prospects across the economy as a whole to be harmed as the overall cost to the national wage bill will be a little over half of one per cent." The Commission’s main recommendations on the National Minimum Wage are: Consistent with introducing the wage at an early date and the Commission’s aim to proceed with prudence, the initial rate should be £3.60 per hour introduced in April 1999. The Commission advised that the appropriate rate should be £3.70 per hour in June 2000. An initial Development Rate of £3.20 per hour should be introduced in April 1999. The Commission advised that the appropriate Development Rate in June 2000 should be £3.30 per hour. A minimum Development Rate should be available for 18-20 year olds. It should also be available for those aged 21 or over for up to a maximum of six months for workers beginning an new job with a new employer and who are receiving accredited training. All those aged 16 and 17, together with those on apprenticeships, should be exempt from the National Minimum Wage. Earnings that may count towards the National Minimum Wage include only pay for standard working - including piece rates, commissions and tips paid through the payroll - but excluding most benefits and premium payments. The National Minimum Wage must be implemented and enforced effectively. Commenting on the Commission’s report, Professor Bain said: "The Commission has had a historic task. This is the first time that a National Minimum Wage, covering all business sectors and parts of the United Kingdom, has been introduced. "We were very conscious that businesses and individuals throughout the country will be directly affected by our recommendations. That is why we read widely and travelled widely to gather the evidence we needed. "We believe our recommendations form a coherent package designed to support a competitive economy. Above all, they should benefit many businesses and make a difference to low-paid workers throughout the United Kingdom." Commenting on the Government’s response to the Commission’s recommendations, Professor Bain said "Our recommendations were made on the basis of careful analysis and extensive consultation. We remain confident that our own recommendations are sufficiently cautious. In particular, we believe from talking to employers and employees that by their 21st birthday, at least, workers should be treated as adults. But at the end of the day it is the Government, not the Commission, that has to take responsibility. "We welcome the Government’s clear statement that we as a Commission have a continuing role, including the specific task of reviewing the treatment of 21 year olds. Our recommendations on the rates and levels are clearly important. We have made at least twenty other recommendations. We are pleased that the Government has also accepted the principle of these other recommendations." Professor Bain stressed that introducing a National Minimum Wage that supports training and skills enhancement had been an important priority for the Commission. "Investment in training and skills development are key to successful business. A skilled workforce is a productive and competitive workforce. Training and development improve people’s employability and enhance their ability to command higher wages. "The Development Rate available to workers 22 or over for the first six months on accredited training will encourage employers to train new staff. In the long term we hope the Development Rate for younger workers can be linked with and dependent on the promotion of structured training and development." Professor Bain also said that Commissioners wanted the National Minimum Wage to encourage people to move from unemployment and welfare into work, and its effects must continue to be felt after its introduction. "We hope our recommendations will play a part in giving workless households and those in low-paid employment more opportunities to live not in the margins, but in the mainstream of society. "This must be a continuous process, with periodic uprating to ensure that the benefits of the National Minimum Wage continue to be felt well into the new millennium." Notes to Editors 1. Professor George Bain, Chairman of the Low Pay Commission, was addressing the TUC Congress in Blackpool. 2. ‘The National Minimum Wage - First Report of the Low Pay Commission’ was published in June 1998. 3. The Low Pay Commission will become a statutory body following the commencement of the National Minimum Wage Act 1998 in September. Terms of reference will be announced by the Secretary of State for Trade and Industry shortly. 4. The members of the Low Pay Commission are: Professor George Bain (Chairman), President and Vice-Chancellor, The Queen’s University of Belfast; Professor William Brown, Professor of Industrial Relations, University of Cambridge; Bill Callaghan, Chief Economist, Trades Union Congress; John Cridland, Director of Human Resources Policy, Confederation of British Industry; Lawrie Dewar, M.B.E., Chief Executive, Scottish Grocers’ Federation; Rita Donaghy, OBE, Permanent Secretary, Students’ Union, University of London Institute of Education and member UNISON Executive Council; Paul Gates, General Secretary, National Union of Knitwear, Footwear and Apparel Trades; Professor David Metcalf, Professor of Industrial Relations, London School of Economics; and Stephanie Monk, Director of Human Resources, Granada Group plc. Low Pay Commission Elizabeth House 39 York Road London SE1 7NQ Tel. 020 7855 4553 | |
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